Town's Economic Incentive Program Working As Intended

MANCHESTER — Economic development incentive programs since 1985 have accomplished what the town intended -- bring in jobs and boost the tax base -- according to the town planner.

Mark Pellegrini, director of planning and economic development, and his staff have completed a 15- page report on the incentive programs.

The board of directors had asked for a comprehensive evaluation of the economic development programs. The report includes an explanation of the programs, the process of evaluating and approving financial deals and the programs' results.

For more than 30 years, the town has offered a variety of financial incentives and services, prompted by the loss of many of its core businesses in the mid-1940s through the late '50s.

In 1966, the town adopted industrial guidelines to reimburse businesses up to 100 percent of improvement costs if they agree to develop raw land for industrial lots. The Progress Drive industrial subdivision was among the first to use the program.

The financial incentive programs include: tax assessment agreements; the industrial guidelines; tax incentives for certain areas, such as contaminated sites that must be cleaned; tax lien sales; and federal, state or other grant applications for businesses.

The 10 financial incentive deals awarded since 1985 totaled about $13.1 million in uncollected revenue. In the period of 1995 to 1997, however, the town collected a total of $20 million in taxes from these same companies, representing a 53 percent return on those deals.

If the $3 million in taxes paid by the Buckland Hills Mall since 1988 are included, the revenues jump to $23 million, a 69 percent return.

``If our intention is to keep businesses in town, to help new businesses locate in town, to help businesses expand in town, to provide employment and services, and to expand the grand list, every one of these deals has met some or all of those objectives,'' Pellegrini said Friday.

The town's largest tax break went to the mall, which got a seven-year abatement on its tax assessment, a deal valued at $9 million.

Pellegrini said that the 346 businesses that have directly or indirectly benefited from these programs represent a small portion of the 2,200 businesses in town. He also said the town's incentives are generally small parts of a development or relocation decision.

The board of directors will discuss the report at its meeting on Tuesday, at 7:30 p.m., in Lincoln Center.